Oil prices hit record highs

Middle East tensions cause price of crude to close at over $90 for first time.

Fri Oct 26 2007 16:38:12 GMT+0000

Traders predict further price rises [AFP]

The Nymex crude contract jumped $3.36 to settle at $90.46 a barrel on Thursday in the US, closing above $90 a barrel for the first time.

Eugen Weinberg, a commodity analyst, said: "With oil taking the $90 hurdle, a price of $100 seems more and more likely, if only for speculative reasons."

As the US announced new sanctions against Iran, analysts say that any confrontation between the US, the world's largest oil consumer, and Iran, the fourth-largest oil producer, has the potential to effect markets.

Muhammad-Ali Zainy, a senior energy economist at the Centre for Global Energy Studies in London told Al Jazeera that if OPEC does not act in regard to oil supply and demand, then it is likely that oil prices will rise to $100 a barrel.

Meanwhile, traders worry that further hostilities in the Middle East would draw in oil producers such as Saudi Arabia and Iran.